Exelon CEO Christopher Crane said the nation's largest nuclear generator will decide in September whether to close its money-losing, 1,824-MW Quad Cities merchant nuclear plant in Illinois.
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Time is running out for Exelon to craft an economic solution for three Illinois nuclear plants -- Byron and Clinton are the others, totaling about 5,000 MW of generation -- Crane said in comments webcast Thursday from the Sanford Bernstein Strategic Decisions Conference in New York.
The Chicago-based company had hoped the Illinois General Assembly would pass Exelon-backed legislation creating a low-carbon portfolio standard to provide the nuclear plants with an estimated $300 million/year in economic support before its 2015 regular session adjourns late next week.
That appears unlikely, although lawmakers still could consider the legislation during a two-week fall veto session in November.
Also crucial to Quad Cities' fate, and presumably that of Byron as well, is PJM Interconnection's base residual auction later this year, probably during the week of August 10-14.
Quad Cities, a two-unit facility along the Mississippi River near Cordova, went into commercial operation in 1973.
"If the Illinois Legislature takes up the low-carbon standard this session, that would be great," Crane said. "But we are on the clock to make an announcement or decision in September, and we will make that if [Quad Cities] doesn't clear the auction and if we don't have a bill. If it doesn't clear the capacity auction, we'll have to take the next steps in announcing its early demise."
While Crane was speaking specifically about Quad Cities, Exelon spokesman Paul Adams said Friday his message essentially refers to Byron as well.
Quad Cities and Byron are in PJM, a regional grid operator based in Pennsylvania. The Clinton plant is in the rival Midcontinent Independent System Operator region.
Regarding Clinton, Crane said his company has "done a lot" to reduce the plant's operating costs. Nevertheless, "the reality for Clinton is that if there is not a low-carbon portfolio standard, the MISO market is not designed to support a competitive generator like that."
Longer term, Crane said single-unit nuclear plants, of which Exelon owns a few, may be an endangered species in the US.
"In decades to come there will be less nuclear units [in the country]," he said. Small, single-unit plants like 610-MW Ginna in New York and 637-MW Oyster Creek in New Jersey "are not going to be able to compete in the future," he said.
Exelon, which claims to be the world's third-largest nuclear generator with 19,000 MW of nuclear capacity, plans to extend the lives of its largest dual-unit nuclear plants "beyond 60 years to 80 years," Crane said.
Crane said he disagrees with some who foresee the demise of the power industry's central station model.
"I think there is going to be a new model," with distributed generation and renewables playing an increasing role, but "the demise of central station generation is a little overstated," he said.
Exelon owns about 33,000 MW of capacity, including 9,000 MW of natural gas-fired generation. The company operates power plants in 24 states.